XXXXX FARGO FUNDS TRUST
OR
XXXXX FARGO VARIABLE TRUST
AND
THE APPLICABLE STRONG FUND ENTITY
IDENTIFIED ON THE SIGNATURE PAGES HEREOF
AGREEMENT AND
PLAN OF
REORGANIZATION
DATED AS OF SEPTEMBER 13, 2004
This AGREEMENT AND PLAN OF REORGANIZATION (the or this "Plan") is made as
of this 13th day of September, 2004, by and between Xxxxx Fargo Funds Trust, a
Delaware statutory trust, and Xxxxx Fargo Variable Trust, a Delaware statutory
trust, each as applicable to the acquisition of the applicable Acquired Funds
(as hereinafter defined) (as applicable, "Xxxxx Fargo Funds"), each acting for
itself and on behalf of its series (each an "Acquiring Fund") and the Strong
Fund entities identified on the signature pages hereof, each either a Delaware
statutory trust or a Wisconsin corporation as indicated on the signature pages
hereof (each, a "Registrant"), each acting for itself and on behalf of its
series (each an "Acquired Fund"), (as to Section 21 only) Xxxxx Fargo Funds
Management, LLC, a Delaware limited liability company ("WFFM") and (as to
Section 21 only) Strong Capital Management, Inc., a Wisconsin corporation
("SCM").
WHEREAS, Xxxxx Fargo & Company; Xxxxx Capital Management Incorporated;
WFFM; Xxxxx Fargo Bank, N.A.; Xxxxx Fargo Investments, LLC; Strong Financial
Corporation ("SFC"); and certain shareholders of SFC entered into an Asset
Purchase Agreement (the "Purchase Agreement") dated as of May 25, 2004 which,
among other things, provides for the purchase of certain assets of SFC by Xxxxx
Fargo and its affiliates and contemplates a reorganization of the Acquired
Funds, which are currently being managed by SCM, into the Acquiring Funds;
WHEREAS, Xxxxx Fargo Funds and Registrant are open-end management
investment companies registered with the Securities and Exchange Commission (the
"SEC") under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the parties desire that each Acquiring Fund (a "Corresponding
Acquiring Fund") acquire substantially all of the assets and assume
substantially all of the liabilities of the Acquired Fund listed above opposite
the Acquiring Fund ("Corresponding Acquired Fund") in exchange for shares of
equal value of the Acquiring Fund and the distribution of the shares of the
Acquiring Fund to the shareholders of the Corresponding Acquired Fund in
connection with the liquidation and termination of the Corresponding Acquired
Fund (each transaction between an Acquiring Fund and its Corresponding Acquired
Fund, a "Reorganization");
WHEREAS, in connection with the Reorganizations, as soon as reasonably
practicable following the steps above, Registrant shall be liquidated and
dissolved, transferring any and all of its remaining assets and liabilities,
other than the right to receive any shares of the Acquired Funds referred to
above, to a new trust (the "Successor Trust"); and
WHEREAS, the parties intend that each Reorganization qualify as a
"reorganization," within the meaning of Section 368(a) of the Internal Revenue
Code of 1986 (the "Code"), and that each Acquiring Fund and its Corresponding
Acquired Fund be a "party to a reorganization," within the meaning of Section
368(b) of the Code, with respect to that Reorganization;
NOW, THEREFORE, in accordance with the mutual promises described herein,
the parties agree as follows:
1. DEFINITIONS.
The following terms shall have the following meanings:
1933 ACT The Securities Act of 1933, as amended.
1934 ACT The Securities Exchange Act of 1934, as amended.
ACQUIRED CLASS The Acquired Fund share class set forth opposite an Acquiring Class in the
Corresponding Classes Table on Schedule A.
ACQUIRING CLASS The class of an Acquiring Fund's shares that Xxxxx Fargo Funds will issue to
the shareholders of the Corresponding Acquired Class as set forth in the
Corresponding Classes Table on Schedule A.
ACQUIRED FUND FINANCIAL STATEMENTS For Active Reorganizations (as defined below), the audited financial
statements of each Acquired Fund for its most recently completed fiscal year
and, if applicable, the unaudited financial statements of each Acquired Fund
for its most recently completed semi-annual period.
ACQUIRING FUND FINANCIAL STATEMENTS For Active Reorganizations involving Acquiring Funds that are not Shell
Acquiring Funds, the audited financial statements of each Acquiring Fund for
its most recently completed fiscal year and, if applicable, the unaudited
financial statements of each Acquiring Fund for its most recently completed
semi-annual period.
ACQUIRED ASSETS All Assets, other than the Excluded Assets.
ACTIVE REORGANIZATION Each Reorganization set forth in the Active Reorganization Table on Schedule
A.
ASSETS All property and assets of any kind and all interests, rights, privileges
and powers of or attributable to an Acquired Fund, whether or not
determinable at the Effective Time and wherever located. Assets include all
cash, cash equivalents, securities, insurance policies and rights
thereunder, claims (whether absolute or contingent, Known or unknown,
accrued or unaccrued or conditional or unmatured), contract rights and
receivables (including dividend and interest receivables) owned by an
Acquired Fund and any deferred or prepaid expense shown as an asset on the
Acquired Fund's books.
ASSUMED LIABILITIES All Liabilities, other than the Excluded Liabilities, of an Acquired Fund,
including the obligations of each Acquired Fund to indemnify, advance funds
to, defend, contribute to the liability of, and/or hold harmless, the
president and/or any director of the Acquired Fund under or pursuant to a
contract identified on Schedule C or such Acquired Fund's constituent
documents, in either case, as in effect on or prior to the date of this
Plan, except those relating to or resulting from the Specified Rights and
Obligations.
BOARD Board of Directors or Board of Trustees of Registrant or Xxxxx Fargo Funds,
as the context requires (and references herein to "directors" or "trustees"
of either entity mean the directors or trustees, as applicable, of that
entity).
CLOSING DATE April 8, 2005, or such other time as the parties may agree to in writing
with respect to a Reorganization.
CONTINGENT SETTLEMENT AND RELEASE
AGREEMENT The Contingent Settlement and Release Agreement dated May 14, 2004, by and
among the Acquired Funds, SCM, and the other SFC-affiliated defendants.
EFFECTIVE TIME 9:00 a.m. Eastern Time on the business day following the Closing Date of a
Reorganization, or such other time and date as the parties may agree to in
writing.
EXCLUDED ASSETS All rights of an Acquired Fund: (i) under or in respect of this Plan, (ii)
in respect of its relationship with any legal counsel relating to this Plan
or the Specified Rights and Obligations, including without limitation, any
attorney-client, attorney work-product, or other privilege, or (iii) that
comprise Specified Rights and Obligations, which shall not be deemed to be
Assets at the Effective Time and shall not be transferred to an Acquiring
Fund, but instead shall be retained by the Acquired Fund.
EXCLUDED LIABILITIES All Liabilities of the Acquired Funds in respect of the Specified Rights and
Obligations, which shall not be deemed to be Liabilities at the Effective
Time and shall not be transferred to an Acquiring Fund but instead shall be
retained by the Acquired Fund.
HSR ACT The Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
KNOW, KNOWN OR KNOWLEDGE Known after reasonable inquiry.
LIABILITIES Any and all debts, liabilities and obligations, whether accrued or
unaccrued, Known or unknown, absolute or contingent, conditional or fixed,
matured or unmatured, or determined or determinable, of, allocated or
attributable to, an Acquired Fund.
LIQUIDATING TRUST A trust (i) meeting the requirements set forth in Internal Revenue Service
Revenue Procedure 82-58, 1982-2 C.B. 848; (ii) that is at no time described
in Section 851(a)(1) or Section 851(a)(2) of the Code; and (iii) that does
not elect to be treated as a corporation for federal or applicable state tax
purposes.
MARKETABLE TITLE References in this Plan to marketable title mean marketable title subject to
any restrictions on transferability imposed under or in connection with
applicable securities laws; for example, title to securities that are
"restricted securities" (as defined in Rule 144(a)(3) under the 0000 Xxx)
shall not be deemed to not result in marketable title by reason of the
restrictions on transfer imposed on restricted securities pursuant to the
1933 Act.
MATERIAL AGREEMENTS The agreements set forth on Schedule C, as may be amended from time to time.
N-1A REGISTRATION
STATEMENT The Registration Statement of Xxxxx Fargo Funds on Form N-1A under the 1933
Act and the 1940 Act as filed with the SEC and in effect as of the date of
this Plan.
N-14 REGISTRATION STATEMENT
The Registration Statement of Xxxxx Fargo Funds on Form N-14 under the 1933
Act and the 1940 Act that will register the shares of each Acquiring Fund to
be issued in the Reorganizations and will include the proxy materials
necessary for the shareholders of the Corresponding Acquired Funds to
approve the Reorganizations.
PRESIDENT References in this Plan to the president of the Acquired Funds or any of
them refer to Xxxxxxx X. Xxxxxxxx.
REORGANIZATION DOCUMENTS Such bills of sale, assignments, and other instruments of transfer as Xxxxx
Fargo Funds and Registrant deem desirable for an Acquired Fund to transfer
to an Acquiring Fund all right and title to and interest in the
Corresponding Acquired Fund's Acquired Assets and Assumed Liabilities and
for the Acquiring Fund to assume the Corresponding Acquired Fund's Acquired
Assets and Assumed Liabilities.
SCHEDULE A Schedule A to this Plan.
SCHEDULE B Schedule B to this Plan, as amended from time to time.
SCHEDULE C Schedule C to this Plan, as amended from time to time.
SCHEDULE D Schedule D to this Plan.
SCHEDULE E Schedule E to this Plan.
SHELL ACQUIRING FUNDS The Acquiring Funds that have no assets or liabilities as of the date of
this Plan.
SHELL REORGANIZATIONS The Reorganizations set forth in the Shell Reorganization Table on Schedule
A.
SPECIFIED CLAIMS Any rights that arise out of or relate to any and all matters relating to
(1) the allegations contained in the complaint filed by the New York
Attorney General and settled September 3, 2003, including but not limited to
the shareholder class actions and derivative actions disclosed as items 1
through 51 on Schedule B, (2) any litigation or other proceeding arising out
of the same or similar allegations, (3) any litigation or other proceeding
arising out of any investigations or other matters that are or should be
identified on Schedule B, and (4) any personal trading in mutual funds by
Xxxxxxx X. Xxxxxx.
SPECIFIED RIGHTS AND OBLIGATIONS
Any rights or claims (including, without limitation, in respect of
insurance, indemnification, or contribution) in connection with, and
Liabilities of an Acquired Fund in respect of, the Specified Claims.
VALUATION TIME The time on the Closing Date, the business day immediately preceding the
Closing Date if the Closing Date is not a business day or such other time
and date as the parties may agree to in writing, that Xxxxx Fargo Funds
determines the net asset value of the shares of the Acquiring Fund and
Registrant determines the net value of the Acquired Assets of or
attributable to the Corresponding Acquired Fund. Unless otherwise agreed to
in writing, the Valuation Time of a Reorganization shall be as of the date
and time of day then set forth in the N-14 Registration Statement as the
date and time of day as of which net asset value is calculated.
2. REGULATORY FILINGS AND SHAREHOLDER ACTION.
(a) Xxxxx Fargo Funds shall promptly prepare and file the N-14 Registration
Statement with the SEC. Xxxxx Fargo Funds also shall promptly prepare and file
an amendment to its Registration Statement with the SEC on Form N-1A to register
the shares of the Acquiring Funds involved in the Shell Reorganizations. Xxxxx
Fargo Funds shall make any state securities filings necessary to accomplish the
Reorganization as and when required. Prior to making any filing with the SEC of
the N-14 Registration Statement or any amendment thereto, Xxxxx Fargo Funds
shall give Registrant a reasonable opportunity to review and comment thereon and
shall obtain Registrant's consent to the making of such filing. Registrant shall
review such filing and communicate any comments with respect thereto as soon as
reasonably practicable.
(b) Registrant shall assist Xxxxx Fargo Funds in preparing the N-14
Registration Statement and the Form N-1A amendment referenced in Subsection 2(a)
of this Plan.
(c) The parties shall seek orders of the SEC, if appropriate, providing
them with any necessary relief from the 1940 Act to permit them to consummate
the transactions contemplated by this Plan.
(d) As soon as practicable after the effective date of the N-14
Registration Statement, each Acquired Fund shall hold a meeting of its
shareholders to consider and approve this Plan, the Reorganization and such
other matters as the Board of the Acquired Fund may determine.
(e) Each of Registrant and Xxxxx Fargo Funds shall use all commercially
reasonable efforts to cause all of the conditions to the obligations of the
other set forth in Section 7 or 8 hereof to be satisfied as promptly as
reasonably practicable following the date of this Plan.
3. TRANSFER OF ACQUIRED FUND ACQUIRED ASSETS. Registrant, on behalf of each
Acquired Fund, and Xxxxx Fargo Funds shall take the following steps with respect
to each Reorganization:
(a) On or prior to the Closing Date, Registrant shall endeavor to pay or
make reasonable provision to pay out of the Acquired Fund's Assets all of the
Liabilities, expenses, costs and charges of or attributable to the Acquired Fund
that are Known to Registrant and that are due and payable as of the Closing
Date.
(b) At the Effective Time, Registrant shall assign, transfer, deliver and
convey all of the Acquired Assets of each Acquired Fund to the Corresponding
Acquiring Fund. Xxxxx Fargo Funds shall then accept the Acquired Assets and
assume the Assumed Liabilities such that at and after the Effective Time (i) all
of the Acquired Assets at or after the Effective Time shall become and be the
assets of the Acquiring Fund and (ii) all of the Assumed Liabilities at the
Effective Time shall attach to the Acquiring Fund, and be enforceable against
the Acquiring Fund to the same extent as if initially incurred by the Acquiring
Fund. Xxxxx Fargo Funds agrees on behalf of each Acquiring Fund that upon any
merger, consolidation, conversion of form of entity, corporate reorganization,
liquidation, dissolution, or sale or disposition (whether in a single
transaction or a series of related transactions) of all or substantially all of
the assets of such Acquiring Fund within three (3) years after the Closing Date,
it will cause the surviving or transferee entity to agree in writing to be bound
by all of the Acquiring Fund's obligations under clause (ii) of this Section
3(b).
(c) Registrant shall assign, transfer, deliver and convey the Acquired
Fund's Acquired Assets to the Corresponding Acquiring Fund at the
Reorganization's Effective Time on the following bases:
(1) In exchange for the transfer of the Acquired Assets, Xxxxx Fargo
Funds shall simultaneously issue and deliver to the Acquired Fund full and
fractional shares of beneficial interest of the corresponding Acquiring
Class. Xxxxx Fargo Funds shall determine the number of shares of each
Acquiring Class to issue by dividing the net value of the Acquired Assets
attributable by ratable allocation to the corresponding Acquired Class by
the net asset value of one Acquiring Class share. Based on this
calculation, Xxxxx Fargo Funds shall issue shares of beneficial interest of
each Acquiring Class with an aggregate net asset value equal to the net
value of the Acquired Assets of the corresponding Acquired Class.
(2) The parties shall determine the net asset value of the Acquiring
Fund shares to be delivered, and the net value of the Acquired Assets to be
conveyed, as of the Valuation Time in accordance with Xxxxx Fargo Funds
current valuation policies and procedures, a copy of which has been
furnished to Registrant. The parties shall make all computations to the
fourth decimal place or such other decimal place as the parties may agree
to in writing.
(3) Registrant shall cause its custodian to transfer the Acquired
Assets with good and marketable title to the custodian for the account of
the Acquiring Fund. Registrant shall cause its custodian to transfer all
cash in the form of immediately available funds payable to the order of the
Xxxxx Fargo Funds' custodian for the account of the Acquiring Fund.
Registrant shall cause its custodian to transfer any Acquired Assets that
were not transferred to the Acquiring Fund's custodian at the Effective
Time to the Xxxxx Fargo Funds' custodian at the earliest practicable date
thereafter.
(d) Promptly after the Closing Date, Registrant will deliver to Xxxxx Fargo
Funds an unaudited statement of Assets and Liabilities of the Acquired Fund as
of the Closing Date.
(e) Notwithstanding anything herein to the contrary, the Specified Rights
and Obligations shall not be Acquired Assets or Assumed Liabilities and shall
not be assigned, transferred, delivered or conveyed to the Acquiring Fund or
accepted or assumed by Xxxxx Fargo Funds.
4. LIQUIDATION AND TERMINATION OF ACQUIRED FUNDS, REGISTRATION OF SHARES
AND ACCESS TO RECORDS. Registrant, on behalf of each of the Acquired Funds, and
Xxxxx Fargo Funds, shall take the following steps with respect to each
Reorganization:
(a) At or as soon as reasonably practical after the Effective Time,
Registrant shall liquidate by (i) distributing to shareholders of record of the
corresponding Acquired Class immediately prior to the Effective Time full and
fractional shares of beneficial interest of the corresponding Acquiring Class
equal in value, as of the Valuation Time, to the shares of the corresponding
Acquired Class held of record by the shareholder immediately prior to the
Effective Time, and (ii) transferring the Excluded Assets and the Excluded
Liabilities to the Successor Trust in accordance with applicable law and
Registrant's Articles of Incorporation or Declaration of Trust. Each shareholder
also shall have the right to receive from the Acquiring Fund at or as soon as
practicable after the Effective Time any unpaid dividends or other distributions
that Registrant declared with respect to the shareholder's Corresponding
Acquired Fund shares before the Effective Time. Xxxxx Fargo Funds shall record,
on separate and distinct records for each Acquiring Fund, the ownership by the
shareholders of the respective Acquiring Fund shares; Registrant shall
simultaneously redeem and cancel on its books all of the issued and outstanding
shares of each corresponding Acquired Class. Xxxxx Fargo Funds does not issue
certificates, and shall not be required to issue certificates to shareholders of
the Acquired Funds. Registrant shall wind up its business and the affairs of the
Acquired Funds and shall take all steps as are necessary and proper to dissolve
and terminate Registrant and the Acquired Funds as soon as is reasonably
practicable after the Effective Time and in accordance with all applicable laws
and regulations, as set forth in the Plan of Dissolution contained in Schedule
D.
(b) At and after the Closing Date, Registrant shall provide Xxxxx Fargo
Funds and its transfer agent with immediate access to: (i) all records
containing the names, addresses and taxpayer identification numbers of all of
the Acquired Fund shareholders and the number and percentage ownership of the
outstanding shares of the corresponding Acquired Classes owned by each
shareholder immediately prior to the Effective Time and (ii) all original
documentation (including all applicable Internal Revenue Service forms,
certificates, certifications and correspondence) relating to the Acquired Fund
shareholders' taxpayer identification numbers and their liability for or
exemption from back-up withholding. Prior to the Closing Date, Registrant shall
direct its service providers that maintain records with respect to the Acquired
Fund as are required by Section 31 of, and Rules 31a-1 and 31a-2 under, the 1940
Act to continue to preserve and maintain such records as required by such
Section and Rules, unless Xxxxx Fargo Funds and Registrant agree in writing that
such records be delivered to Xxxxx Fargo Funds or to another service provider.
As soon as practicable following the Reorganization, Registrant shall deliver
all books and records with respect to the Acquired Fund in its possession or
control, including books and records showing the ownership of all of the issued
and outstanding shares of each corresponding Acquired Class, to Xxxxx Fargo
Funds and Xxxxx Fargo Funds shall thereafter have the responsibility to preserve
and maintain, or to cause its service providers to preserve and maintain, all
such records received by it in accordance with Section 31 of, and Rule 31a-1 and
31a-2 under, the 1940 Act.
(c) If Xxxxx Fargo Funds or any Acquiring Fund receives any distribution
from the Contingent Settlement and Release Agreement or any regulatory
settlement, it shall not retain such distribution except as such retention may
be in accordance with the Contingent Settlement and Release Agreement or such
regulatory settlement, as the case may be, and otherwise will remit it promptly
to the Successor Trust, which shall deliver such distribution (or cause the
delivery thereof) to the person or persons entitled thereto in accordance with
the Contingent Settlement and Release Agreement or regulatory settlement, as the
case may be, and, to the extent not inconsistent with such agreement or
regulatory settlement, this Plan.
5. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF REGISTRANT.
Registrant, on behalf of itself and, as appropriate, each of its Acquired Funds,
separately and not jointly, represents and warrants to, and agrees with, Xxxxx
Fargo Funds as follows:
(a) Registrant is a statutory trust or corporation, duly created, validly
existing and in good standing under the laws of the State of Delaware or
Wisconsin. The Board of Registrant duly established and designated each of the
Acquired Funds as a series of Registrant. Registrant is registered with the SEC
as an open-end management investment company under the 1940 Act, and such
registration is in full force and effect.
(b) Each of Registrant and the Acquired Funds has the power and all
necessary federal, state and local qualifications and authorizations to own all
of its properties and Assets, to carry on its business as now being conducted
and described in its currently effective Registration Statement on Form N-1A as
filed with the SEC and amended from time to time, to enter into this Plan and,
subject to the approval of shareholders referred to in Section 2, to consummate
the transactions contemplated herein.
(c) The Board of Registrant has duly authorized the execution and delivery
of the Plan and the transactions contemplated herein. Duly authorized officers
of Registrant have executed and delivered the Plan. The Plan represents a valid
and binding contract, enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization, arrangement, moratorium,
and other similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles. The execution and delivery
of this Plan does not, and, subject to the approval of shareholders referred to
in Section 2, the consummation of the transactions contemplated by this Plan
will not, violate any applicable law or regulation, Registrant's Articles of
Incorporation or Trust Instrument and By-Laws or other constituent agreements or
any Material Agreement. Except for the approval of the shareholders of each
Acquired Fund, Registrant does not need to take any other action to authorize
its officers to effectuate this Plan and the transactions contemplated herein.
(d) For each taxable year of its operation (including, as applicable, the
taxable year ending on the day of the Effective Time), each Acquired Fund has
met (or will meet) the requirements under Part I of Subchapter M of Subtitle A,
Chapter 1, of the Code for qualification as a regulated investment company and
has computed (or will compute) its federal income tax liability, if any, under
Section 852 of the Code.
(e) The N-14 Registration Statement, when filed with the SEC, when
distributed to shareholders and at the time of the shareholder meeting of each
Acquired Fund for the Reorganization and at the Effective Time of the
Reorganization, insofar as it relates to the Registrant and each Acquired Fund:
shall not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein not misleading in light of the circumstances under which they were
made.
(f) Registrant has duly authorized and validly issued all of the issued and
outstanding shares of each Acquired Fund and all of the shares are validly
outstanding, fully paid and non-assessable by Registrant, and were offered for
sale and sold in conformity, in all material respects, with the registration
requirements of all applicable federal and state securities laws. There are no
outstanding options, warrants or other rights to subscribe for or purchase the
shares of any Acquired Fund, nor are there any securities convertible into
shares of any Acquired Fund, except to the extent that Class B shares of an
applicable Acquired Fund are convertible into Class A shares under certain
circumstances.
(g) Except in respect of the facts underlying the matters disclosed on
Schedule B, as to which no representation is made, Registrant, with respect to
each Acquired Fund, is in compliance in all material respects with all
applicable laws, rules and regulations, including, without limitation, the 1940
Act, the 1933 Act, the 1934 Act and all applicable state securities laws, and,
from the date of this Plan through the Closing Date, shall comply in all
material respects with all newly adopted rules and regulations under the 1940
Act on or before their compliance dates. Except in respect of the facts
underlying the matters disclosed on Schedule B as to which no representation is
made, Registrant, with respect to each Acquired Fund, is in compliance in all
material respects with the investment policies and restrictions applicable to it
set forth in its Form N-1A Registration Statement currently in effect. The value
of the net assets of each Acquired Fund is determined using portfolio valuation
methods that comply in all material respects with the requirements of the 1940
Act and the policies of such Acquired Fund and all purchases and redemptions of
shares of each Acquired Fund have been effected at the net asset value per share
calculated in such a manner.
(h) Except as otherwise provided herein, Registrant shall operate the
business of each of the Acquired Funds in the ordinary course between the date
hereof and the Effective Time, it being agreed that such ordinary course of
business will include (i) the declaration and payment of dividends and
distributions pursuant to standard dividend and distribution policies approved
by such Acquired Fund's Board prior to the date of this Plan, (ii) the
declaration and payment of any other dividends and distributions deemed
advisable by mutual agreement of such Acquired Fund and Xxxxx Fargo Funds in
anticipation of the Reorganization, and (iii) the taking of any other
commercially reasonable action in anticipation of the Reorganization (including
obtaining such additional "run off" insurance coverage as Registrant's Board may
approve and selling assets for purposes of realizing taxable gains to offset
tax-loss carryforwards). Notwithstanding the foregoing, Registrant shall: (i)
not take any action inconsistent with the treatment of any Reorganization as a
"reorganization," within the meaning of Section 368(a) of the Code; and (ii)
take all commercially reasonable actions necessary to ensure satisfaction of
representations in the certificate to be provided to Xxxxxxxx & Xxxxxxxx LLP in
connection with their opinion described in Sections 7(g) and 8(f).
(i) At the Effective Time, each Acquired Fund will have good and marketable
title to its Assets and, subject to the approval of such Acquired Fund's
shareholders, full right, power and authority to assign, transfer, deliver and
convey such Assets.
(j) The Acquired Fund Financial Statements, copies of which have been
previously delivered to Xxxxx Fargo Funds fairly present in accordance with
generally accepted accounting principles consistently applied the financial
position of the Acquired Fund as of the Acquired Fund's most recent fiscal
year-end and, if applicable, semi-annual period-end, and the results of the
Acquired Fund's operations and changes in the Acquired Fund's Known Assets and
Known Liabilities in the ordinary course for the periods indicated. The Acquired
Fund Financial Statements have been prepared in accordance with generally
accepted accounting principles consistently applied.
(k) To the Knowledge of Registrant, none of the Acquired Funds has any
Liabilities, other than Liabilities that arise out of or result from the
Specified Rights and Obligations, Liabilities disclosed or provided for in the
Acquired Fund Financial Statements and Liabilities incurred in the ordinary
course of business subsequent to the date of the Acquired Fund Financial
Statements. Without limiting the generality of the previous sentence, none of
the Acquired Funds has any Liabilities to SCM or any other service provider of
such Acquired Fund for fees previously waived or deferred by SCM or any other
such service provider.
(l) Except as disclosed on Schedule B, Registrant does not Know of any
claims, actions, suits, inquiries, investigations or proceedings of any type
pending or threatened against any Acquired Fund, its Assets or businesses or any
of the Acquired Funds' advisers or principal underwriters (all of whom are
identified on Schedule E hereto) relating to the services such adviser or
underwriter provides to any of the Acquired Funds. Except for the facts
underlying the matters disclosed on Schedule B, none of the Acquired Funds Knows
of any facts that it currently has reason to believe are likely to form the
basis for the institution of any such claim, action, suit, inquiry,
investigation or proceeding against such Acquired Fund, or any of its advisers
or principal underwriters relating to the services such adviser or underwriter
provides to such Acquired Fund. For purposes of this provision, investment
underperformance or negative investment performance shall not be deemed to
constitute such facts. Except as disclosed on Schedule B, neither Registrant nor
any of the Acquired Funds and to their Knowledge, none of their advisers or
principal underwriters is a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body that adversely affects, or
is reasonably likely to adversely affect, its financial condition, results of
operations, business, properties or Assets or its ability to consummate the
transactions contemplated by the Plan.
(m) All contracts, agreements and similar instruments to which any of the
Acquired Funds are party or by which any of them are bound that (i) are material
to Registrant's business as it relates to the Acquired Funds or (ii) grant a
right to indemnification, advancement of funds, defense, contribution to the
liability of and/or be held harmless to any director or the president of any
Acquired Fund, are listed on Schedule C. No material default exists on the part
of the Registrant or any Acquired Fund or, to the Registrant's Knowledge, any
other party, under any contract or agreement listed on Schedule C. With respect
to any contract, agreement or similar instrument related to any of the Acquired
Funds to which Registrant is a party that is not listed on Schedule C: (i) such
contract, agreement or similar instrument was entered into in the ordinary
course of Registrant's business; (ii) no material default exists with respect to
such contract, agreement or similar instrument on the part of Registrant or any
of the Acquired Funds, or to the Registrant's Knowledge, any other party; and
(iii) such contract, agreement or similar instrument is not material to the
business of Registrant. Nothing in this Section prevents Registrant from
entering into, amending or terminating a contract, agreement or instrument after
the date of this Plan if such action would not constitute a breach of any of
Registrant's representations or other obligations under this Plan.
(n) Registrant has (i) timely filed all of its and its Acquired Fund's tax
returns for all of their taxable years to and including the Acquired Fund's most
recent taxable year required to be filed on or before the date of this Plan, and
has paid all taxes payable pursuant to such returns; or otherwise made
sufficient provision therefor; and (ii) made available to Xxxxx Fargo Funds all
of its and its Acquired Fund's previously filed tax returns. To the Knowledge of
Registrant, no such return is currently under audit and no assessment has been
asserted with respect to such returns. Registrant will file all of its and its
Acquired Fund's tax returns (and pay any taxes due thereon) for all of their
taxable periods ending on or before the Effective Time not previously filed on
or before their due dates (taking account of any valid extensions thereof).
(o) Since the date of the Acquired Fund Financial Statements, there has
been no material adverse change in the financial condition, results of
operations, business, properties or Assets of the Acquired Fund. For purposes of
this provision, investment underperformance, negative investment performance or
net redemptions shall not be deemed to constitute such facts, provided all
customary performance disclosures have been made.
(p) Registrant has not established a deferred compensation plan for the
benefit of members of its Board.
(q) The Successor Trust shall constitute a Liquidating Trust.
6. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF XXXXX FARGO FUNDS.
Xxxxx Fargo Funds, on behalf of itself and, as appropriate, each of its
Acquiring Funds, separately and not jointly, represents and warrants to, and
agrees with Registrant as follows:
(a) Xxxxx Fargo Funds is a statutory trust duly created, validly existing
and in good standing under the laws of the State of Delaware. The Board of Xxxxx
Fargo Funds duly established and designated each Acquiring Fund as a series of
Xxxxx Fargo Funds and each Acquiring Class as a class of the Acquiring Fund.
Xxxxx Fargo Funds is registered with the SEC as an open-end management
investment company under the 1940 Act, and such registration is in full force
and effect.
(b) Each of Xxxxx Fargo Funds and the Acquiring Funds has the power and all
necessary federal, state and local qualifications and authorizations to own all
of its properties and assets, to carry on its business as described in its
Registration Statement on Form N-1A as filed with the SEC, to enter into this
Plan and to consummate the transactions contemplated herein.
(c) The Board of Xxxxx Fargo Funds has duly authorized the execution and
delivery of the Plan and the transactions contemplated herein. Duly authorized
officers of Xxxxx Fargo Funds have executed and delivered the Plan. The Plan
represents a valid and binding contract, enforceable in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium and other similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles. The
execution and delivery of this Plan does not, and the consummation of the
transactions contemplated by this Plan will not, violate any applicable law or
regulation, the Declaration of Trust of Xxxxx Fargo Funds or other constituent
documents or any Material Agreement. Xxxxx Fargo Funds does not need to take any
other action to authorize its officers to effectuate the Plan and the
transactions contemplated herein.
(d) For each taxable year of its operation, each Acquiring Fund (other than
an Acquiring Fund participating in a Shell Reorganization) has met (or will
meet) the requirements under Part I of Subchapter M of Subtitle A, Chapter 1, of
the Code for qualification as a regulated investment company and has computed
(or will compute) its federal income tax under Section 852 of the Code.
(e) The N-14 Registration Statement, when filed with the SEC, when
distributed to shareholders and at the time of the shareholder meeting of each
Acquired Fund for the Reorganization and at the Effective Time of the
Reorganization: (i) shall comply in all material respects with the applicable
provisions of the 1933 Act, the 1934 Act and the 1940 Act, the rules and
regulations thereunder and state securities laws and (ii) insofar as it relates
to the Xxxxx Fargo Funds and each Acquiring Fund and the Acquiring Classes shall
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein not misleading in light of the circumstances under which they were made.
(f) If the Reorganization is a Shell Reorganization, each applicable
Acquiring Fund shall have no assets or liabilities as of the Closing Date, and
there shall be no issued and outstanding shares of such Acquiring Fund prior or
at to the Closing Date, other than those acquired, assumed or issued in order to
facilitate the commencement of the operations of such Acquiring Fund.
(g) Xxxxx Fargo Funds has duly authorized and validly issued all of the
issued and outstanding shares of each Acquiring Fund and those shares are fully
paid and non-assessable and were offered for sale and sold in conformity, in all
material respects, with the registration requirements of all applicable federal
and state securities laws. Xxxxx Fargo Funds shall duly authorize the shares of
each Acquiring Fund to be issued and delivered to the Acquired Fund as of the
Effective Time. When issued and delivered, the shares of each Acquiring Fund
shall have been registered for sale under the 1933 Act and qualified under all
applicable state securities laws and shall be duly and validly issued, fully
paid and non-assessable, and no shareholder of any Acquiring Fund shall have any
preemptive right of subscription or purchase in respect of them. There are no
outstanding options, warrants or other rights to subscribe for or purchase the
shares of any Acquiring Fund, nor are there any securities convertible into
shares of any Acquiring Fund.
(h) Xxxxx Fargo Funds, with respect to each Acquiring Fund, is and at the
Effective Time, will be in compliance in all material respects with all
applicable laws, rules and regulations, including, without limitation, the 1940
Act, the 1933 Act, the 1934 Act, and all applicable state securities laws, and
from the date of this Plan through the Closing Date will comply in all material
respects with all newly adopted rules and regulations under the 1940 Act on or
before their compliance dates. Xxxxx Fargo Funds, with respect to each Acquiring
Fund, is in compliance in all material respects with the investment policies and
restrictions applicable to it set forth in the Form N-1A Registration Statement.
The value of the net assets of each Acquiring Fund is determined using portfolio
valuation methods that comply in all material respects with the requirements of
the 1940 Act and the policies of the Acquiring Fund and all purchases and
redemptions of shares of each Acquiring Fund have been effected at the net asset
value per share calculated in such a manner.
(i) Except as disclosed on Schedule B, Xxxxx Fargo Funds does not Know of
any claims, actions, suits, inquiries, investigations or proceedings of any type
pending or threatened against Xxxxx Fargo Funds, WFFM, or any Acquiring Fund or
their assets or businesses, or against any of the Acquiring Funds' advisers or
principal underwriters (all of whom are identified on Schedule E hereto)
relating to the services such adviser or underwriter provides to e Acquiring
Fund. Xxxxx Fargo Funds does not Know of any facts that it currently has reason
to believe are likely to form the basis for the institution of any such claim,
action, suit, inquiry, investigation or proceeding against Xxxxx Fargo Funds,
WFFM or the Acquiring Fund or any of its advisers or principal underwriters
relating to the services such adviser or underwriter provides to such Acquiring
Fund. For purposes of this provision, investment underperformance or negative
investment performance shall not be deemed to constitute such facts. Neither
Xxxxx Fargo Funds nor any of the Acquiring Funds and to their Knowledge, none of
their advisers or principal underwriters is a party to or subject to the
provisions of any order, decree or judgment of any court or governmental body
that adversely affects, or is reasonably likely to adversely affect, its
financial condition, results of operations, business, properties or Assets or
its ability to consummate the transactions contemplated by this Plan.
(j) All contracts, agreements and similar instruments that are material to
the Xxxxx Fargo Funds' business are listed on Schedule C. No material default
exists under any contract or agreement listed on Schedule C. With respect to any
contract, agreement or similar instrument to which the Xxxxx Fargo Funds are a
party that is not listed on Schedule C: (i) such instrument was entered into in
the ordinary course of the Xxxxx Fargo Funds' business; (ii) no material default
exists with respect to such instrument; and (iii) such instrument is not
material to the business of the Xxxxx Fargo Funds.
(k) Except as otherwise provided herein, Xxxxx Fargo Funds shall operate
the business of each Acquiring Fund in the ordinary course between the date
hereof and the Effective Time, it being agreed that such ordinary course of
business will include (i) the declaration and payment of dividends and
distributions pursuant to standard dividend and distribution policies approved
by the Acquiring Fund's Board prior to the date of this Plan, (ii) the
declaration and payment of any other dividends and distributions deemed
advisable by mutual agreement of each Acquired Fund and Xxxxx Fargo Funds in
anticipation of the Reorganization, and (iii) the taking of any other
commercially reasonably action in anticipation of the Reorganization. Xxxxx
Fargo Funds shall: (i) not take any action inconsistent with the treatment of
any Reorganization as a "reorganization" within the meaning of Section 368(a) of
the Code; and (ii) take all commercially reasonable actions necessary to ensure
satisfaction of representations in the certificate to be provided to Xxxxxxxx &
Xxxxxxxx LLP in connection with their opinion described in Sections 7(g) and
8(f).
(l) At the Effective Time, each Acquiring Fund will have good and
marketable title to its assets.
(m) The Acquiring Fund Financial Statements, copies of which have been
previously delivered to Registrant, have been prepared in accordance with GAAP
and fairly present the financial position of the Acquiring Fund as of the
Acquiring Fund's most recent fiscal year-end and, if applicable, semi-annual
period-end, and the results of the Acquiring Fund's operations and changes in
the Acquiring Fund's Known assets and Known liabilities in the ordinary course
for the periods indicated. The Acquiring Fund Financial Statements have been
prepared in accordance with generally accepted accounting principles
consistently applied.
(n) To the Knowledge of Xxxxx Fargo Funds, none of the Acquiring Funds has
any liabilities, whether or not determined or determinable, other than the
liabilities disclosed or provided for in the Acquiring Fund Financial Statements
and liabilities incurred in the ordinary course of business subsequent to the
date of this Plan. Without limiting the generality of the previous sentence,
none of the Acquiring Funds has any liabilities to any service provider of the
Acquiring Fund for fees previously waived or deferred by such service provider.
(o) Xxxxx Fargo Funds has (i) timely filed all of its and its Acquiring
Fund's tax returns for all of their taxable years to and including the Acquiring
Fund's most recent taxable year required to be filed on or before the date of
this Plan, and has paid all taxes payable pursuant to such returns; or otherwise
made sufficient provision therefor; and (ii) made available to Registrant all of
its and its Acquiring Fund's previously filed tax returns. To the Knowledge of
Xxxxx Fargo Funds, no such return is currently under audit and no assessment has
been asserted with respect to such returns. Xxxxx Fargo Funds will file all of
its and its Acquiring Fund's tax returns (and pay any taxes due thereon) for all
of their taxable periods ending on or before the Effective Time not previously
filed on or before their due dates (taking account of any valid extensions
thereof).
(p) Since the date of the Acquiring Fund Financial Statements, there has
been no material adverse change in the financial condition, results of
operations, business, properties or assets of any Acquiring Fund. For purposes
of this provision, investment underperformance, negative investment performance
or net redemptions shall not be deemed to constitute such facts, provided all
customary performance disclosures have been made.
(q) Class B and Class C shares held in investor accounts of an Acquired
Fund as of the Closing Date, which were purchased subject to the Acquired Fund's
current contingent deferred sales charge ("CDSC") schedule, will continue to be
subject to that CDSC schedule. Class B shares purchased before the Closing Date
will convert to Class A shares after a conversion period of eight years after
the initial purchase. The period of time such Class B shares were held before
the Closing Date will be counted for purposes of calculating the eight-year
conversion period. The period of time such Class C shares were held before the
Closing Date will be counted for purposes of calculating the holding period.
7. CONDITIONS TO AN ACQUIRED FUND'S OBLIGATIONS. The obligations of an
Acquired Fund with respect to its Reorganization, and the obligations of
Registrant with respect to that Reorganization, shall be subject to the
following conditions precedent:
(a) The shareholders of the Acquired Fund shall have approved the
Reorganization in the manner required by the Articles of Incorporation or Trust
Instrument and applicable law. If the Acquired Fund's shareholders fail to
approve the Reorganization, that failure shall release Registrant of its
obligation under this Plan only with respect to that Reorganization and not any
other Reorganization.
(b) Xxxxx Fargo Funds shall have duly executed and delivered to the
Acquired Fund the Acquiring Fund's Reorganization Documents.
(c) All representations and warranties of Xxxxx Fargo Funds made in this
Plan that are not by their terms qualified as to materiality shall be true and
correct in all material respects, and all representations and warranties of
Xxxxx Fargo Funds made in this Plan that by their terms are qualified as to
materiality are true and correct in all respects, in each case as if made at and
as of the Valuation Time and the Effective Time.
(d) (1) Xxxxx Fargo Funds shall have delivered to Registrant a certificate
dated as of the Closing Date and executed in its name by its Secretary or
Treasurer, in a form reasonably satisfactory to Registrant, stating that all
representations and warranties of Xxxxx Fargo Funds in this Plan that are not by
their terms qualified as to materiality are true and correct in all material
respects, and all representations and warranties of Xxxxx Fargo Funds made in
this Plan that by their terms are qualified as to materiality are true and
correct in all respects, in each case at and as of the Valuation Time and the
Effective Time. (2) Xxxxx Fargo Funds also shall have delivered to Registrant a
certificate dated as of the Closing Date and executed in its name by its
Secretary or Treasurer (or Assistant Secretary or Treasurer), in form reasonably
satisfactory to Registrant, stating that it has approved the Acquired Fund's
Acquired Assets as being consistent with the Acquiring Fund's investment
objectives, policies and restrictions and that the Acquired Fund's Acquired
Assets may otherwise be lawfully acquired by the Acquiring Fund.
(e) Registrant shall have received an opinion of Xxxxxxxx & Xxxxxxxx LLP,
as counsel to Xxxxx Fargo Funds, in form and substance reasonably satisfactory
to Registrant and dated as of the Closing Date, addressed to Registrant,
substantially to the effect that:
(1) Xxxxx Fargo Funds is a statutory trust duly created, validly
existing and in good standing under the laws of the State of Delaware and
is an open-end, management investment company registered under the 1940
Act;
(2) the shares of the Acquiring Fund to be delivered as provided for
by this Plan are duly authorized and upon delivery will be validly issued,
fully paid and non-assessable by Xxxxx Fargo Funds, provided that the
payments for transfer taxes by shareholders provided for in Section 4(b) of
this Plan shall not be deemed to render the shares issued assessable;
(3) this Plan has been duly authorized, executed and delivered by
Xxxxx Fargo Funds, and the execution and delivery of this Plan did not, and
the consummation of the Reorganization will not, violate the Declaration of
Trust of Xxxxx Fargo Funds or any Material Agreement to which Xxxxx Fargo
Funds is a party or by which it is bound; and
(4) to the Knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority is required
for the consummation by Xxxxx Fargo Funds of the Reorganization, or for the
execution and delivery of Xxxxx Fargo Funds' Reorganization Documents,
except those that have been obtained under the 1933 Act, the 1934 Act, the
1940 Act and the rules and regulations under those Acts or that may be
required under state securities laws, the HSR Act or subsequent to the
Effective Time or when the failure to obtain the consent, approval,
authorization or order would not have a material adverse effect on the
operation of the Acquiring Fund.
In rendering such opinion, such counsel may (i) rely on the opinion of other
counsel to the extent set forth in such opinion, (ii) make assumptions regarding
the authenticity, genuineness and/or conformity of documents and copies thereof
without independent verification thereof, (iii) limit such opinion to applicable
federal and state law, (iv) define the word "Knowledge" and related terms to
mean the Knowledge of attorneys then with such firm who have devoted substantive
attention to matters directly related to this Plan and (v) rely on certificates
(reasonably acceptable to Registrant) of officers or trustees of Xxxxx Fargo
Funds.
(f) Registrant shall have received an opinion of Xxxxxxxx, Xxxxxx & Finger,
P.A., as counsel to Xxxxx Fargo Funds, in form and substance reasonably
satisfactory to Registrant and dated as of the Closing Date, addressed to
Registrant, substantially to the effect that: assuming due authorization,
execution and delivery of this Plan by each of the parties hereto, the Plan
represents a legal, valid and binding contract of the Acquiring Fund,
enforceable in accordance with its terms, subject to the effect of bankruptcy,
insolvency, moratorium, receivership, fraudulent conveyance and transfer and
similar laws relating to or affecting creditors' rights generally and court
decisions with respect thereto, and further subject to the application of
equitable principles in any proceeding whether at law or in equity or with
respect to the enforcement of provisions of the Plan, the effect of judicial
decisions which have held that certain provisions are unenforceable when their
enforcement would violate an implied covenant of good faith and fair dealing or
would be commercially unreasonable or when default under the Plan is not
material and the effect of applicable public policy on the enforceability of
provisions relating to indemnification or contribution. In rendering such
opinion, such counsel may (i) make assumptions regarding the authenticity,
genuineness and/or conformity of documents and copies thereof without
independent verification thereof, (ii) limit such opinion to applicable state
law, and (iii) rely on certificates (reasonably acceptable to Registrant) of
officers or trustees of Xxxxx Fargo Funds.
(g) Registrant shall have received an opinion addressed to it and dated as
of the Closing Date of Xxxxxxxx & Xxxxxxxx LLP, stating that each Acquired Fund
and its shareholders may rely thereon, based upon representations reasonably
acceptable to Xxxxxxxx & Xxxxxxxx LLP made in certificates provided to Xxxxxxxx
& Xxxxxxxx LLP by Xxxxx Fargo Funds, Registrant, their affiliates and/or
principal shareholders, addressed to Registrant and Xxxxx Fargo Funds in a form
reasonably satisfactory to Registrant substantially to the effect that (i) each
Reorganization will constitute a "reorganization," within the meaning of Section
368(a) of the Code; (ii) no gain or loss will be recognized by an Acquired Fund
upon the transfer of such Acquired Fund's assets to the Corresponding Acquiring
Fund solely in exchange for such Acquiring Fund's shares and the assumption by
the Corresponding Acquiring Fund of liabilities of such Acquired Fund or upon
the distribution of the Corresponding Acquiring Fund shares to such Acquired
Fund's shareholders in exchange for their shares of such Acquired Fund in
connection with the Reorganization; (iii) the tax basis of the assets of an
Acquired Fund to be transferred to the Corresponding Acquiring Fund in the
Reorganization in the hands of the Corresponding Acquiring Fund will be the same
as the tax basis of such assets in the hands of such Acquired Fund immediately
prior to the transfer; (iv) the holding period in the assets of an Acquired Fund
to be transferred to the Corresponding Acquiring Fund in the Reorganization in
the hands of the Corresponding Acquiring Fund will include the period during
which such assets were held by such Acquired Fund; (v) no gain or loss will be
recognized by an Acquiring Fund upon the receipt of the assets of the
Corresponding Acquired Fund solely in exchange for such Acquiring Fund's shares
and the assumption by such Acquiring Fund of liabilities of the Corresponding
Acquired Fund; (vi) no gain or loss will be recognized by the shareholders of an
Acquired Fund upon the receipt of the Corresponding Acquiring Fund's shares
solely in exchange for their shares of such Acquired Fund as part of the
Reorganization; (vii) the tax basis of the Acquiring Fund shares to be received
by each shareholder of the Corresponding Acquired Fund will be, in the
aggregate, the same as the tax basis, in the aggregate, of the Corresponding
Acquired Fund shares surrendered in exchange therefor; and (viii) the holding
period in the Acquiring Fund shares received by each shareholder of the
Corresponding Acquired Fund in the Reorganization will include the holding
period during which the shares of the Corresponding Acquired Fund exchanged
therefor were held, provided that at the time of the exchange the shares of the
Corresponding Acquired Fund were held as capital assets in the hands of such
shareholder.
(h) Registrant shall have received a memorandum addressed to Registrant and
Xxxxx Fargo Funds, in form and substance reasonably satisfactory to Registrant
and Xxxxx Fargo Funds, prepared by Xxxxxxxx & Xxxxxxxx LLP, or another person
agreed to in writing by the parties, concerning compliance with each relevant
state's securities laws in connection with Xxxxx Fargo Funds' issuance of
Acquiring Fund shares.
(i) The N-1A Registration Statement and the N-14 Registration Statement
shall have become effective under the 1933 Act as to the Acquiring Fund's shares
and no stop order suspending the effectiveness of the N-1A Registration
Statement or the N-14 Registration Statement shall have been issued and, to the
Knowledge of the parties, the SEC shall not be contemplating issuing such a stop
order.
(j) There shall not be in effect on the Closing Date any order, judgment,
injunction or other decree of any court of competent jurisdiction restraining,
enjoining, or otherwise prohibiting or making illegal the consummation of the
transactions contemplated by this Plan.
(k) The SEC shall not have issued any unfavorable advisory report under
Section 25(b) of the 1940 Act relating to, or instituted any proceeding seeking
to enjoin consummation of, the Reorganization under Section 25(c) of the 1940
Act.
(l) Xxxxx Fargo Funds shall have performed and complied in all material
respects with each of its agreements and covenants required by this Plan to be
performed or complied with by it prior to or at the Reorganization's Valuation
Time and Effective Time.
(m) Registrant shall have received from Xxxxx Fargo Funds a duly executed
instrument, in a form and substance reasonably acceptable to Registrant, whereby
the Acquiring Fund assumes all of the Assumed Liabilities.
(n) Registrant shall have received a letter dated as of the effective date
of the N-14 Registration Statement from KPMG LLP ("KPMG") addressed to
Registrant and Xxxxx Fargo Funds with respect to each Acquired Fund and each
Acquiring Fund that is not a Shell Acquiring Fund for which KPMG serves as the
independent registered public accounting firm in form and substance reasonably
satisfactory to Registrant to the effect that on the basis of limited procedures
as reasonably agreed to by Registrant and described in such letter (but not an
examination in accordance with generally accepted auditing standards):
(1) the data used in the preparation of the relevant unaudited pro
forma financial statements and relevant pro forma adjustments included in
the N-14 Registration Statement agree, in all material respects, with the
underlying accounting records of the Acquired Fund(s) and Acquiring Fund,
respectively, or to schedules prepared by officers of the Registrant or
Xxxxx Fargo Funds, having responsibility for financial and reporting
matters;
(2) the data used in the calculation of any expense ratios of the fund
appearing in the N-14 Registration Statement agree, in all material
respects, with the underlying accounting records of such fund, as
appropriate, or with written estimates provided by officers of Registrant
or Xxxxx Fargo Funds, as appropriate, having responsibility for financial
and reporting matters; and
(3) the information relating to the fund appearing in the N-14
Registration Statement that is expressed in dollars or percentages of
dollars, if any, has been obtained from the accounting records of such
fund, or from schedules prepared by officers of Registrant or Xxxxx Fargo
Funds having responsibility for financial and reporting matters and such
information is in agreement, in all material respects, with such records or
schedules or with computations made therefrom.
Registrant also shall have received a letter dated as of the Closing Date that
KPMG has agreed the relevant unaudited pro forma financial statements and
relevant pro forma adjustments, the expense ratios and other information
expressed in dollars or percentages, as noted in clauses (1), (2) and (3) of
this Section 7(n), with the N-14 Registration Statement filed as of the closing
date.
(o) Neither party shall have terminated this Plan with respect to the
Reorganization pursuant to Section 11 of this Plan.
(p) As of the Closing Date, there shall have been no material change in the
investment objective, policies and restrictions nor any material increase in the
investment management fees, fee levels payable pursuant to any 12b-1 plan of
distribution or shareholder servicing plan or agreement, other fees payable for
services provided to the Acquiring Fund, or sales loads of the Acquiring Fund
nor any material reduction in the fee waiver or expense reduction undertakings
from those described in the N-1A Registration Statement respecting the Acquiring
Fund and in the N-14 Registration Statement.
(q) SCM and/or Registrant, as applicable, shall have satisfied their
financial obligations, if any, to all other service providers of the Acquired
Funds, with respect to the obligations of the Acquired Funds arising out of or
in connection with the termination of any agreements with such service providers
prior to or simultaneously with the Reorganizations.
(r) The Xxxxx Fargo Funds shall have received an order of the SEC relieving
the Xxxxx Fargo Funds from the provision of Section 15(f) of the 1940 Act that
would otherwise require the Xxxxx Fargo Funds Board from the Effective Time to
consist of at least 75% of members who are not "interested persons" of SCM or
the investment adviser or sub-adviser to the Acquiring Fund as defined in the
1940 Act; or the Xxxxx Fargo Funds Board shall be constituted in such a manner
as to meet such 75% requirement.
(s) The parties shall have received any necessary order of the SEC
providing them with relief from the 1940 Act as may be needed to permit the
Reorganization.
8. CONDITIONS TO XXXXX FARGO FUNDS OBLIGATIONS. The obligations of an
Acquiring Fund with respect to its Reorganization, and the obligations of Xxxxx
Fargo Funds with respect to that Reorganization, shall be subject to the
following conditions precedent:
(a) The shareholders of the Acquired Fund shall have approved the
Reorganization in the manner required by its Articles of Incorporation or Trust
Instrument and applicable law. If the Acquired Fund's shareholders fail to
approve the Reorganization, that failure shall release Xxxxx Fargo Funds of its
obligation under this Plan only with respect to that Reorganization and not any
other Reorganization.
(b) Registrant shall have duly executed and delivered to Xxxxx Fargo Funds
the Acquired Fund Reorganization Documents.
(c) All representations and warranties of Registrant made in this Plan that
by their terms are not qualified as to materiality shall be true and correct in
all material respects, and all representations and warranties of Registrant made
in this Plan that by their terms are qualified as to materiality are true and
correct in all respects, in each case as if made at and as of the Valuation Time
and the Effective Time.
(d) Registrant shall have delivered to Xxxxx Fargo Funds a certificate
dated as of the Closing Date and executed in its name by its Treasurer or
Secretary, in a form reasonably satisfactory to Xxxxx Fargo Funds, stating that
the representations and warranties of Registrant in this Plan that by their
terms are not qualified as to materiality are true and correct in all material
respects, and all representations and warranties of Registrant in this Plan that
are by their terms qualified as to materiality are true and correct in all
respects, in each case at and as of the Valuation Time and the Effective Time.
(e) Xxxxx Fargo Funds shall have received an opinion of Xxxxxxx & Xxxx,
S.C., as counsel to Registrant, (or, as to the opinion described in Section
8(e)(4), of Delaware counsel to the Registrant) in form and substance reasonably
satisfactory to Xxxxx Fargo Funds and dated as of the Closing Date,
substantially to the effect that:
(1) Registrant is a statutory trust or corporation duly created and
validly existing under the laws of the State of Delaware or Wisconsin and
is an open-end, management investment company registered under the 1940
Act;
(2) this Plan has been duly authorized, executed and delivered by
Registrant, and the execution and delivery of this Plan did not, and the
consummation of the Reorganization will not, violate the Articles of
Incorporation or Trust Instrument and By-Laws of Registrant or any Material
Agreement to which Registrant is a party or by which it is bound;
(3) to the Knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority is required
for the consummation by Registrant of the Reorganization, or the execution
and delivery of Registrant Reorganization Documents, except those that have
been obtained under the 1933 Act, the 1934 Act, the 1940 Act and the rules
and regulations under those Acts, or that may be required under state
securities laws, the HSR Act or subsequent to the Effective Time or when
the failure to obtain the consent, approval, authorization or order would
not have a material adverse effect on the operation of the Acquired Fund;
and
(4) assuming due authorization, execution and delivery of this Plan by
each of the parties hereto, the Plan represents a legal, valid and binding
contract of the Acquired Fund, enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, moratorium, receivership,
fraudulent conveyance and transfer and similar laws relating to or
affecting creditors' rights generally and court decisions with respect
thereto, and further subject to the application of equitable principles in
any proceeding whether at law or in equity or with respect to the
enforcement of provisions of the Plan, the effect of judicial decisions
which have held that certain provisions are unenforceable when their
enforcement would violate an implied covenant of good faith and fair
dealing or would be commercially unreasonable or when default under the
Plan is not material and the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution.
In rendering such opinion, such counsel may (i) rely on the opinion of other
counsel to the extent set forth in such opinion, (ii) make assumptions regarding
the authenticity, genuineness and/or conformity of documents and copies thereof
without independent verification thereof, (iii) limit such opinion to applicable
federal and state law, (iv) define the word "Knowledge" and related terms to
mean the Knowledge of attorneys then with such firm who have devoted substantive
attention to matters directly related to this Plan, (v) rely on certificates
(reasonably acceptable to Xxxxx Fargo Funds) of officers or directors/trustees
of Registrant, (vi) except in the case of the opinion given by Delaware counsel
to the Registrant in regard to this Plan, assume that each of this Plan and each
Material Agreement is governed by the internal laws of the State of Wisconsin,
without regard to the laws that otherwise might govern under applicable
principles of conflicts of laws thereof and notwithstanding any other choice of
law or governing law provision contained in this Plan or any such Material
Agreement, and (vii) assume that each of this Plan and each Material Agreement
would be enforced as written.
(f) Xxxxx Fargo Funds shall have received an opinion dated as of the
Closing Date of Xxxxxxxx & Xxxxxxxx LLP, upon which each Acquiring Fund and its
shareholders may rely, based upon representations reasonably acceptable to
Xxxxxxxx & Xxxxxxxx LLP made in certificates provided to Xxxxxxxx & Xxxxxxxx LLP
by Xxxxx Fargo Funds, Registrant, their affiliates and/or principal
shareholders, addressed to Registrant and Xxxxx Fargo Funds and Registrant in a
form reasonably satisfactory to the Xxxxx Fargo Funds, with respect to the
matters described in Section 7(g).
(g) The N-1A Registration Statement and the N-14 Registration Statement
shall have become effective under the 1933 Act as to the Acquiring Fund's shares
and no stop order suspending the effectiveness of the N-1A Registration
Statement or the N-14 Registration Statement shall have been issued and, to the
Knowledge of the parties, the SEC shall not be contemplating issuing such a stop
order.
(h) There shall not be in effect on the Closing Date any order, judgment,
injunction or other decree of any court of competent jurisdiction restraining,
enjoining, or otherwise prohibiting or making illegal the consummation of the
transactions contemplated by this Plan.
(i) The SEC shall not have issued any unfavorable advisory report under
Section 25(b) of the 1940 Act relating to, nor instituted any proceeding seeking
to enjoin consummation of, the Reorganization under Section 25(c) of the 1940
Act.
(j) Registrant shall have performed and complied in all material respects
with each of its agreements and covenants required by this Plan to be performed
or complied with by it prior to or at the Reorganization's Valuation Time and
Effective Time.
(k) Registrant shall have taken all steps required to terminate any
agreements with its service providers with respect to the Acquired Funds and
shall have discharged in the normal course of business any and all payment
obligations under such agreements.
(l) If the Reorganization is an Active Reorganization, Xxxxx Fargo Funds
shall have received a letter dated as of the effective date of the N-14
Registration Statement from KPMG addressed to Registrant and Xxxxx Fargo Funds
with respect to each Acquired Fund and each Acquiring Fund that is a Shell
Acquiring Fund in form and substance reasonably satisfactory to Xxxxx Fargo
Funds to the effect that on the basis of limited procedures as reasonably agreed
to by Xxxxx Fargo Funds and described in such letter (but not an examination in
accordance with generally accepted auditing standards):
(1) The data used in the preparation of the relevant unaudited pro
forma financial statements and relevant pro forma adjustments included in
the N-14 Registration Statement agree, in all material respects, with the
underlying accounting records of the Acquired Fund(s) and Acquiring Fund,
respectively, or to schedules prepared by officers of the Registrant or
Xxxxx Fargo Funds, having responsibility for financial and reporting
matters;
(2) the data used in the calculation of any expense ratios of the
Acquired Fund appearing in the N-14 Registration Statement agree, in all
material respects, with the underlying accounting records of the Acquired
Fund, as appropriate, or with written estimates provided by officers of
Registrant having responsibility for financial and reporting matters; and
(3) the information relating to the Acquired Fund appearing in the
N-14 Registration Statement that is expressed in dollars or percentages of
dollars, if any, has been obtained from the accounting records of the
Acquired Fund, or from schedules prepared by officers of Registrant having
responsibility for financial and reporting matters and such information is
in agreement, in all material respects, with such records or schedules or
with computations made therefrom.
Xxxxx Fargo Funds also shall have received a letter dated as of the Closing Date
that KPMG has agreed the relevant unaudited pro forma financial statements and
relevant pro forma adjustments, the expense ratios and other information
expressed in dollars or percentages, as noted in clauses (1), (2) and (3) of
this Section 8(l), with the N-14 Registration Statement filed as of the closing
date.
(m) Xxxxx Fargo Funds shall have received a letter dated as of the
effective date of the N-14 Registration Statement from KPMG addressed to
Registrant and Xxxxx Fargo Funds with respect to each Acquired Fund in a Shell
Reorganization in form and substance reasonably satisfactory to Xxxxx Fargo
Funds to the effect that on the basis of limited procedures as reasonably agreed
to by Xxxxx Fargo Funds and described in such letter (but not an examination in
accordance with generally accepted auditing standards):
(1) the data used in the calculation of any expense ratio of the
Acquired Fund appearing in the N-14 Registration Statement agree, in all
material respects, with the underlying accounting records of the Acquired
Fund, or with written estimates provided by officers of Registrant having
responsibility for financial and reporting matters; and
(2) the information relating to the Acquired Fund appearing in the
N-14 Registration Statement that is expressed in dollars or percentages of
dollars, if any, has been obtained from the accounting records of the
Acquired Fund, or from schedules prepared by officers of Registrant having
responsibility for financial and reporting matters and such information is
in agreement, in all material respects, with such records or schedules or
with computations made therefrom.
Xxxxx Fargo Funds Registrant also shall have received a letter dated as of the
Closing Date that KPMG has agreed the expense ratios and other information
expressed in dollars or percentages, as noted in clauses (1) and (2) of this
Section 8(m), with the N-14 Registration Statement filed as of the closing date.
(n) Except to the extent prohibited by Rule 19b-1 under the 1940 Act, prior
to the Valuation Time, each Acquired Fund shall have declared a dividend or
dividends, with a record date and ex-dividend date prior to the Valuation Time,
which, together with all previous dividends, shall have the effect of
distributing to the Acquired Fund shareholders all of such Acquired Fund's
previously undistributed (i) "investment company taxable income" within the
meaning of Section 852(b) of the Code (determined without regard to Section
852(b)(2)(D) of the Code), (ii) amounts constituting the excess of (A) the
amount specified in Section 852(a)(1)(B)(i) of the Code over (B) the amount
specified in Section 852(a)(1)(B)(ii) of the Code, and (iii) net capital gain
(within the meaning of Section 1222(11) of the Code), if any, realized in
taxable periods or years ending on or before the Effective Time.
(o) Neither party shall have terminated this Plan with respect to the
Reorganization pursuant to Section 11 of this Plan.
(p) The Xxxxx Fargo Funds shall have received an order of the SEC relieving
the Xxxxx Fargo Funds from the provision of Section 15(f) of the 1940 Act that
would otherwise require the Xxxxx Fargo Funds Board from the Effective Time to
consist of at least 75% of members who are not "interested persons" of SCM or
the investment adviser or sub-adviser to the Acquiring Fund as defined in the
1940 Act; or the Xxxxx Fargo Funds Board shall be constituted in such a manner
as to meet such 75% requirement.
(q) The parties shall have received any necessary order of the SEC
providing them with any relief from the 1940 Act as may be needed to permit the
Reorganization.
(r) Registrant shall have delivered to Xxxxx Fargo Funds, or shall have
made provision for delivery as promptly as practicable after the Effective Time
of, a statement, accurate and complete in all material respects, of (i) assets
of each Acquired Fund of Registrant, showing the tax basis of such assets for
federal income tax purposes by lot and the holding periods of such assets for
such purposes, as of the Valuation Time; and (ii) the capital loss carry
forwards for each Acquired Fund for federal income tax purposes and the taxable
year(s) of the Acquired Fund (or its predecessors) in which such capital losses
were realized.
(s) The transactions under the Purchase Agreement to be consummated on or
before the Effective Time shall have been consummated.
(t) All documents establishing and relating to the operation of the
Successor Trust shall be reasonably satisfactory to Xxxxx Fargo Funds and the
Successor Trust shall have agreed to be bound by the terms of this Plan that are
applicable to it.
9. TAX MATTERS. Except where otherwise required by law, the parties shall
not take a position on any tax returns inconsistent with the treatment of each
Reorganization for tax purposes as a "reorganization," within the meaning of
Section 368(a) of the Code and each Acquiring Fund and the Corresponding
Acquired Fund will comply with the record keeping and information filing
requirements of Section 1.368-3 of the Treasury Regulation in accordance
therewith.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the parties hereto set forth in Sections 5 and 6 of this Plan or
the certificates referred to in Sections 7(d)(1) and 8(d) of this Plan, and all
rights and obligations in respect of any of these, shall terminate on the
Closing Date.
11. TERMINATION OF PLAN. A majority of a party's Board may terminate this
Plan with respect to any Acquiring Fund or the Acquired Fund prior to the
applicable Reorganization, as appropriate if: (i) the party's conditions
precedent set forth in Sections 7 or 8, as appropriate, are not satisfied on the
Closing Date; or (ii) it becomes reasonably apparent to the party's Board that
the other party will not be able to satisfy such conditions precedent on the
Closing Date. In addition, a majority of a party's Board may terminate this Plan
with respect to any Acquiring Fund or the Acquired Fund prior to the closing of
the transaction under the Purchase Agreement, if the party's Board determines
that the consummation of the Reorganization is not in the best interests of its
shareholders and gives notice to the other party. The termination of this Plan
with respect to an Acquiring Fund and its Corresponding Acquired Fund shall not
affect the continued effectiveness of the Plan with respect to any other
Acquiring Fund or Acquired Fund, nor shall it affect the rights or obligations
of any party in respect of any breach of this Plan occurring prior to such
termination.
12. GOVERNING LAW. This Plan and the transactions contemplated hereby shall
be governed, construed and enforced in accordance with the laws of the State of
Delaware, except to the extent preempted by federal law, without regard to
conflicts of law principles.
13. FINDERS FEES. Each party represents and warrants that there are no
brokers or finders entitled to receive any payments from such party in
connection with the transactions provided for in this Plan.
14. AMENDMENTS. The parties may, by mutual agreement in writing authorized
by their respective Boards, amend this Plan with respect to the Reorganization
at any time before or after the Acquired Fund's shareholders approve the
Reorganization. However, after the Acquired Fund's shareholders approve the
Reorganization, the parties may not amend this Plan in a manner that materially
adversely affects the interests of the Acquired Fund's shareholders with respect
to the Reorganization. This Section shall not preclude the parties from changing
the Closing Date or the Effective Time of the Reorganization by mutual
agreement.
15. WAIVERS. At any time on or prior to the Closing Date, any party may by
written instrument signed by it (i) waive the effect of any inaccuracies in the
representations and warranties made to it contained herein and (ii) waive
compliance with any of the agreements, covenants or conditions made for its
benefit contained herein. However, after the Acquired Fund's shareholders
approve the Reorganization, the Registrant may not grant any waiver that
materiality adversely affects the interests of the Acquired Fund's shareholders
with respect to the Reorganization. The parties agree that any waiver shall
apply only to the particular inaccuracy or requirement for compliance waived,
and not any other or future inaccuracy or lack of compliance.
16. INDEMNIFICATION. Xxxxx Fargo Funds shall indemnify, defend and hold
harmless Registrant, its officers, directors, trustees, employees and agents
against all losses, claims, demands, liabilities and expenses, including
reasonable legal and other expenses incurred in defending claims or liabilities,
whether or not resulting in any liability of Registrant, its officers, trustees,
employees or agents, arising out of or based on (i) any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement on Form N-1A for Xxxxx Fargo Funds that is used in connection with the
Reorganization or in the N-14 Registration Statement or any actual or alleged
omission from any of the foregoing of any material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case, insofar as it relates to the Xxxxx Fargo Funds or the Acquiring Fund or
Acquiring Classes or (ii) any failure of the N-14 Registration Statement insofar
as it relates to the Reorganization, or of any Xxxxx Fargo Fund's registration
statement on Form N-1A that is used in connection with the Reorganization, to
comply as to form in all material respects with the applicable provisions of the
1933 Act, the 1934 Act, and the 1940 Act, and the rules and regulations
thereunder.
17. COOPERATION AND FURTHER ASSURANCES. Each party will cooperate with the
others in fulfilling its obligations under this Plan and will provide such
information and documentation as is reasonably requested by another party in
carrying out this Plan's terms. Each party will provide such further assurances
concerning the performance of its obligations under this Plan and the
consummation of the Reorganization as another party shall reasonably request.
Each party shall notify the other parties on and anytime prior to the Closing
Date if it Knows that any of its representations or warranties in Section 5 or
6, as applicable, are no longer true and correct. Each party will take all
reasonable actions to seek to ensure that each person intended to issue an
opinion, letter or memorandum contemplated by this Plan can issue that opinion,
letter or memorandum.
18. UPDATING OF N-14 REGISTRATION STATEMENT. If at any time prior to the
Effective Time of a Reorganization a party becomes aware of any untrue statement
of material fact in the N-14 Registration Statement or of an omission to state a
material fact required to be stated therein or necessary to make the statements
made therein not misleading in light of the circumstances under which they were
made, the party discovering the item shall notify the other parties and the
parties shall cooperate in promptly preparing, filing and clearing with the SEC
and, if appropriate, distributing to shareholders appropriate disclosure with
respect to the item.
19. LIMITATION ON LIABILITIES. The obligations of Registrant and Xxxxx
Fargo Funds shall not bind any of the trustees, directors, shareholders,
nominees, officers, agents, or employees of Registrant or Xxxxx Fargo Funds
personally, but shall bind only the assets and property of the Acquiring Funds
or the Acquired Funds, as appropriate. The execution and delivery of this Plan
by the parties' officers shall not be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the assets and the property of the Acquiring Funds or the Acquired
Funds, as appropriate.
20. NOTICES. Any notice, report, statement, certificate or demand required
or permitted by any provision of this Plan shall be in writing and shall be sent
by a reputable overnight express carrier, or by registered or certified mail,
postage prepaid, addressed as follows or to such other address of which the
parties may have given notice:
For the Acquired Funds:
Strong Funds
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxx, XX 00000
Attn.: Legal Department
With a copy (which will not constitute notice) sent at the
same time and by the same means to:
Xxxxx X. Xxxx
Xxxxxxx & Xxxx, S.C.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
and
Xxxxx Xxxxxx
Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
For SCM:
Strong Capital Management, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxx, XX 00000
Attn.: Legal Department
With a copy (which will not constitute notice) sent at the
same time and by the same means to:
Xxxxx X. Xxxx
Xxxxxxx & Xxxx, S.C.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
For Xxxxx Fargo Funds or WFFM:
Xxxxx X. Xxxxxxx, President
Xxxxx Fargo Funds Trust
Xxxxx Fargo Funds Management, LLC
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
With a copy (which will not constitute notice) sent at the
same time and by the same means to:
C. Xxxxx Xxxxxxx, Secretary
Xxxxx Fargo Funds Trust
Xxxxx Fargo Funds Management, LLC
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
21. EXPENSES. Each party hereto acknowledges that all expenses incurred by
it in connection with the Reorganization and with this Plan, whether or not the
Reorganization is consummated, shall be borne by WFFM or an affiliate thereof in
the case of Xxxxx Fargo Funds and its affiliates, and SCM or an affiliate
thereof in the case of Registrant and its affiliates in the manner previously
agreed in writing by and between WFFM and SCM.
22. GENERAL. This Plan supersedes all prior agreements among or between the
parties (written or oral) with respect to the subject matter hereof, and is
intended as a complete and exclusive statement of the terms of the agreement
between the parties with respect to the subject matter hereof and may not be
changed or terminated orally. The parties may execute this Plan in counterparts,
which shall be considered one and the same agreement, and shall become effective
when the counterparts have been executed by and delivered to all the parties.
The headings contained in this Plan are for reference only and shall not affect
in any way the meaning or interpretation of this Plan. Nothing in this Plan,
expressed or implied, confers upon any other person any rights or remedies under
or by reason of this Plan except that (i) persons entitled to indemnification
under Section 16 are intended third party beneficiaries of such Section 16; (ii)
the directors and the president, respectively, of an Acquired Fund are intended
third party beneficiaries of the obligations assumed by the Acquiring Fund to
indemnify, advance funds to, defend, contribute to the liability of, and/or hold
harmless any director or the president of the Acquired Fund under or pursuant to
any contract or such Acquired Fund's constituent documents, in each case as in
effect on or prior to the date of this Plan, except those relating to or
resulting from the Specified Rights and Obligations; and (iii) after dissolution
of the Successor Trust, the directors of the Acquired Funds immediately
preceding the Closing Date may take any necessary action to enforce the
obligations of Xxxxx Fargo Funds and the Acquired Funds under Section 3(b);
provided however, that in the case of the foregoing clauses (i) and (ii), such
directors or president must make any claims they may have under insurance
policies or against SCM (and which are not then legally barred from being made,
as for example by the automatic stay applicable with respect to debtors in
bankruptcy proceedings) prior to or contemporaneously with seeking any payment
or advancement of funds from an Acquiring Fund and shall permit the Acquiring
Fund to participate in any discussions with the applicable insurer and/or SCM in
the event such insurer or SCM disputes the insurance coverage or
indemnification; provided, that upon making any such claim against the relevant
insurer or SCM, as the case may be, any obligations of the Acquiring Funds
hereunder to the asserting director or president shall not be subject to any
delay by reason of the pendency of any dispute. Upon any payment to a director
or president pursuant to clauses (i) or (ii) above and the indefeasible payment
in full of such director's or the president's liability that is the subject of
such indemnification payment, the Acquiring Funds shall be subrogated to the
rights of such director or president pursuant to any applicable insurance or any
indemnification obligation of SCM to the extent of the amounts paid by the
Acquiring Fund pursuant to such clauses (i) and (ii). For purposes of the
foregoing, "making a claim" means giving appropriate written notice of the claim
to the party against whom it is asserted. No party may assign or transfer any
right or obligation under this Plan without the written consent of the other
parties (except that the rights of the directors and president of the Acquired
Funds will be transferable pursuant to the laws of descent and distribution),
except that from and after the Effective Time, Registrant may assign its rights
and obligations under and in respect of this Plan to the Successor Trust.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers designated below to execute this Plan as of the date first written
above.
---------------------------------- ----------------------------------------
XXXXX FARGO FUNDS, and on behalf of the
series Funds of each listed on Schedule A:
XXXXX FARGO FUNDS TRUST
ATTEST: XXXXX FARGO VARIABLE TRUST
-------------------------
Name: C. Xxxxx Xxxxxxx _________________________
Title Secretary Name: Xxxxx X. Xxxxxxx
Title: President
------------------------------------ -------------------------------------------
REGISTRANTS, and on behalf of the series
Fund(s) of each listed on Schedule A:
STRONG ADVANTAGE FUND, INC.
STRONG ASIA PACIFIC FUND, INC.
STRONG BALANCED FUND, INC.
STRONG COMMON STOCK FUND, INC.
STRONG CONSERVATIVE EQUITY FUNDS, INC.
STRONG CORPORATE BOND FUND, INC.
STRONG DISCOVERY FUND, INC.
STRONG EQUITY FUNDS, INC.
STRONG EQUITY FUNDS II, INC.
STRONG GOVERNMENT SECURITIES FUND, INC.
STRONG HERITAGE RESERVE SERIES, INC.
STRONG INCOME FUNDS, INC.
STRONG INCOME FUNDS II, INC.
STRONG INTERNATIONAL EQUITY FUNDS, INC.
STRONG LARGE CAP GROWTH FUND, INC.
STRONG LIFE STAGE SERIES, INC.
STRONG MONEY MARKET FUND, INC.
STRONG MUNICIPAL BOND FUND, INC.
STRONG MUNICIPAL FUNDS, INC.
STRONG OPPORTUNITY FUND, INC.
STRONG OPPORTUNITY FUND II, INC.
STRONG SHORT-TERM BOND FUND, INC.
STRONG SHORT-TERM GLOBAL BOND FUND, INC.
STRONG SHORT-TERM MUNICIPAL BOND FUND, INC.
STRONG VARIABLE INSURANCE FUNDS, INC.
each a Wisconsin corporation
and
STRONG INCOME TRUST
a Delaware statutory trust
-------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
ATTEST:
-------------------------
Name: Xxxxxxx X. Xxxxxxxxx, III
Title: Secretary
------------------------------------- ------------------------------------------
XXXXX FARGO FUNDS MANAGEMENT, LLC
(a party to this Plan as to
ATTEST: Section 21 only)
-------------------------
Name: Xxxxxx Xxxx
_________________________ Title President
Name: C. Xxxxx Xxxxxxx
Title Secretary
------------------------------------- ------------------------------------------
ATTEST: STRONG CAPITAL MANAGEMENT, INC.
(a party to this Plan as to
Section 21 only)
-------------------------
_________________________ Name: Xxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx, III Title: Executive Vice President
Title: Secretary
------------------------------------- ------------------------------------------
